Nasdaq Proposes New Listing Rules in Push for Board Diversity

Nasdaq proposed new rules for all listed companies in a push for diversity on their boards.
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Nasdaq  (NDAQ) - Get Report on Tuesday proposed to add new rules designed to increase diversity on the boards of Nasdaq-listed companies.

Shares of the New York firm rose 1% to $129.20 at last check.

In a filing with the U.S. Securities and Exchange Commission, Nasdaq said the rules would require all companies listed on the tech-heavy Nasdaq stock exchange to publicly disclose consistent and transparent diversity statistics regarding their boards. 

The new rules are aimed at strengthening investor confidence "that all listed companies are considering diversity in the context of selecting directors," Nasdaq said.

The rules would require companies to appoint at least two diverse directors on their boards or explain their rationale for not meeting that objective. 

All companies will be expected to have one diverse director within two years of the SEC’s approval of the listing rule.

“Nasdaq’s purpose is to champion inclusive growth and prosperity to power stronger economies,” said President and Chief Executive Adena Friedman in a statement. 

“Our goal with this proposal is to provide a transparent framework for Nasdaq-listed companies to present their board composition and diversity philosophy effectively to all stakeholders; we believe this listing rule is one step in a broader journey to achieve inclusive representation across corporate America.”

Under the proposal, all Nasdaq-listed companies will be required to publicly disclose board-level diversity statistics through Nasdaq’s proposed disclosure framework within one year of the SEC’s approval of the listing rule. 

Nasdaq’s proposal presents an analysis of more than two dozen studies that found an association between diverse boards and better financial performance and corporate governance.